US credit card deal

Visa Inc, MasterCard Inc and banks that issue credit cards have agreed to a $7.25-billion settlement with US retailers in a lawsuit over the fixing of credit and debit card fees in what could be the largest antitrust settlement in US history.

The settlement, if approved by a judge, will resolve dozens of lawsuits filed by retailers in 2005. The card companies and banks will also allow stores to start charging customers extra for using certain credit cards in an effort to steer them towards cheaper forms of payment.

The settlement papers were filed on Friday in Brooklyn federal court.

Swipe fees — charges to cover processing credit and debit payments — are set by the card companies and deducted from the transaction by the banks that issue the cards, essentially passing on the cost to merchants, the lawsuits said.

The proposed settlement involves a payment to a class of stores of $6 billion from Visa, MasterCard and more than a dozen of the country’s largest banks who issue the companies’ cards.

The card companies have also agreed to reduce swipe fees by the equivalent of 10 basis points for eight months for a total consideration to stores valued at about $1.2 billion, according to lawyers for the plaintiffs.

The deal calls for merchants to be allowed to negotiate collectively over the swipe fees, also known as interchange fees.

Merchants will also be required to disclose information about card fees to customers, and credit card surcharges will be subject to a cap, according to the settlement papers. Surcharge rules will not affect the 10 states that currently prohibit that practice, which include California, New York and Texas.

An additional $525 million will be paid to stores suing individually, according to the documents.

Courtesy- Reuters

Is filing the Income Tax Return compulsory?

As an Individual you are required by law to file your Income Tax Returns, if your total income without allowing deductions (such as Section 80C etc) exceeds the basic exemption limit.

For Assessment Year 2012-13, the basic exemption limits are the following:

•   For Men below the age of 60, the exemption limit is Rs. 1,80,000.

•   For Women, below the age of 60, the exemption limit is Rs. 1,90,000.

•   For Senior Citizens, whose age is between 60 years to 80 years, the exemption limit is Rs. 2,50,000. This is identical for men and women.

•   For Super Senior Citizens, of the age of 80 years or more, the exemption limit is Rs. 5,00,000.

What does Total Income without allowing deductions (such as Section 80C etc) actually mean?

Let’s say, your gross total Income is Rs. 2,00,000. You have paid Rs. 50,000 in LIC premium for claiming deduction under Section 80C. Your Taxable Income is Rs. 1,50,000 (Rs. 2,00,000 - Rs. 50,000). The tax payable on Rs. 1,50,000 is Zero.

However, even in this situation, you are required to file your Income Tax Return as your gross total Income exceeds the basic exemption limit of Rs. 1,80,000. (Assuming you are not a senior citizen).

Exemption for filing Income Tax Return for Salaried Employees

For the Assessment Year 2012-13, there is an exemption from filing the Income Tax Return for Salaried employees, subject to the following conditions.

•   Your Total Income after deductions (such as Section 80C etc.) is up to Rs.5,00,000/-.

•   Income other than Salary should be only from Saving Bank Interest, up to Rs.10,000/-. If you have any other source of Income like House Property, Capital Gain, or even interest from fixed deposits, you will have to file your Income Tax Return.

•   You must declare this Interest Income from the Saving Bank to the Employer. The employer then has to deduct the TDS taking into account your Interest Income.

•   If you have a refund due, you need to your file your Income Tax Return to claim this refund.

This exemption is difficult to get in actual practice. You will most likely have to file your Income Tax Return.

This is because; you must declare your Interest Income to your employer before 31st March of the Financial Year. But in most cases, the Bank issues the Interest statement after 31st March. So it is virtually impossible to report the Bank Interest to the employer in time.

Compulsory filing of Income Tax Returns if you have foreign assets.

For the Assessment 2012-13, it is mandatory to file your Income Tax Return if you have any foreign assets. Even though you may not have any taxable Income.

When is e-filing your Income Tax Return compulsory?

For the Assessment year 2012-13, e-filing of the Income Tax Return has become compulsory for the following cases:

•   If your Total Income exceeds Rs.10 Lakhs, then you must e-file your Income Tax Return.

•   If you own foreign assets, you must e-file.

I have paid all my taxes; do I still need to file my Income Tax Return?

As explained above, the law has placed an obligation on you to file the Income Tax Return even if you have no tax due.

Courtesy- http://in.finance.yahoo.com/news/is-filing-the-income-tax-return-compulsory-.html